A Patent System for the 21st Century (2004) / Chapter Skim
Currently Skimming:
4 Seven Recommendations for a 21st Century Patent System
4 Seven Recommendations for a 21st Century Patent System
Pages 81-129
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 81... ...
The Court of Appeals for the Federal Circuit ("Federal Circuit") also should ensure its exposure to a variety of expert opinions by encouraging submission of amicus briefs and by exchanges with other courts.
|
From page 82... ...
· Research liability for patent infringement. In light of the Federal Circuit's 2002 ruling that even noncommercial scientific research enjoys no protection from patent infringement liability, and in view of the academic research community's belief in the existence of such an exemption, and behavior accordingly, there should be some level of protection for noncommercial uses of patented inventions.
|
From page 83... ...
· The USPTO and the Court of Appeals for the Federal Circuit should broaden their consideration of relevant economic and technical analysis. · The non-obviousness standard should be more vigorously applied, at least in some technological fields.
|
From page 84... ...
For example, in 1996 Congress exempted medical practitioners and related health care entities using patented medical procedures from infringement liability rather than bar surgical procedure patents altogether.1 It lengthened terms for some pharmaceutical patents to compensate for regulatory delays2 and protected certain experimental uses of pharmaceuticals by generic suppliers from liability.3 Recently, Congress was persuaded that the advent of business method patents might snare longtime users of newly patented business procedures in infringement suits; but, rather than curtail the issuance of such patents or limit their terms, legislation made prior use a defense available to accused infringers of that class of patents.4 A special obviousness provision deals with concurrent process and composition-ofmatter claims on biotechnology patent applications.5 The Plant Patent Act of 19526 and the Plant Variety Protection Act of 1970,7 representing modified patent regimes, and the 1984 semiconductor mask protection legislation8 and the 1988 Vessel Hull Design Protection Act,9 representing modified copyright regimes, are the only examples of new statutory classes of intellectual protection designed for particular technologies. Apart from the very recent congressional ban on human organism patents,10 clearly a special case, there have been no successful legislative attempts to circumscribe patenting.
|
From page 85... ...
In any case, it has largely tied its hands by ratifying the TRIPS agreement of 1994, which prohibits signatory states from discriminating in the grant of patents based on the technology involved.11 The committee realizes that there may appear to be some contradiction between this position and our belief in the importance of exploiting the mechanisms and doctrines that reflect differences among technologies or allow for some deliberate discrimination among them by the USPTO, by the courts, and by patent holders themselves. These include subtle differences in the application of the common legal standards of obviousness, enablement, and written description, and the various other policy levers described by Burk and Lemley (2003a)
|
From page 86... ...
The Court of Appeals for the Federal Circuit is in most instances the final arbiter of patent law. Both students of and practitioners before the court are in general agreement that the 1982 centralization of patent appeals in the Federal Circuit has been a vast improvement over adjudication in the circuit courts of appeals.
|
From page 87... ...
This would give Federal Circuit judges a better sense of how patent law fits in with other laws influencing innovation and how other courts incorporate economics into their decision making. REINVIGORATE THE NON-OBVIOUSNESS STANDARD Non-Obviousness and Business Method Inventions The non-obviousness determination is necessarily a judgment, not something that can be resolved through a bright line test.
|
From page 88... ...
Section 2144.06 of the Manual of Patent Examining Procedure (MPEP) addresses this issue, relying on three Federal Circuit cases.
|
From page 89... ...
Two previous references were relevant; one disclosed an analogous approach to monitoring certain sulfur compounds, and the other described nitric oxide detectors. Although the examiner and the Board of Patent Appeals thought it obvious to substitute the nitric oxide detector in the system, the Federal Circuit found that there was no support for such a conclusion.
|
From page 90... ...
It is therefore difficult to imagine that another class of patent applications will not pose the same issue in the future. In the meantime, with business methods patent grants, it is true that there will be a steady accumulation of patent prior art.
|
From page 91... ...
The courts, therefore, have held that an invention is only obvious and unpatentable when the obvious route to try is coupled with a "reasonable expectation of success." One of the earliest Federal Circuit decisions in the field of biotechnology, In re O'Farrell,22 found that an invention related to gene expression was unpatentable under the above test even though success was not assured. The O'Farrell court dealt with how high the "reasonable" bar should be set and set it quite low.
|
From page 92... ...
The inventor argued that the prior art relied upon by the USPTO did not suggest all of the modifications to the cited cloning technique to make it operative and that the USPTO had, without supporting evidence, deemed such modifications within the ordinary skill of the field. The Federal Circuit, rather than merely find that the prior art did not provide, for example, sufficient information to make success a reasonable expectation, went one step further.
|
From page 93... ...
All other industrialized countries approach the non-obviousness of novel genes by focusing on the technical hurdle the inventors faced -- cloning the gene. For example, the European Patent Office (EPO)
|
From page 94... ...
Surprisingly, the protocol to clone the human cDNA was not found to be lacking in enablement and presumptively put the human cDNA into the public domain. The continuing viability of this case has been called into serious question by other members of the Federal Circuit.
|
From page 95... ...
Goldgaber claimed the gene. The applicant did not appeal this decision to the Federal Circuit, so it is not known whether the USPTO's approach would have been accepted by the court.
|
From page 96... ...
for a discussion of the features and history of these procedures. 37Effective for re-examinations begun on or after November 2, 2002, a third-party requester in an inter partes re-examination proceeding can appeal to the Federal Circuit a decision by the Board of Patent Appeals and Interferences or to participate in an appeal of a BPAI decision by the patent owner.
|
From page 97... ...
· The Federal District Courts should be able and encouraged to refer issues of patent validity raised in a lawsuit to an Open Review proceeding, confining themselves to resolving issues of infringement. The Department of Justice or the Federal Trade Commission should be able to request the director of the USPTO to initiate a review if they suspect that an invalid patent or patents are being used to adversely affect competition.
|
From page 98... ...
) ( owner (if (original patent and no Patent if parte patent c d e U.S.
|
From page 99... ...
99 continued Circuit confirm cancel Yes Yes Yes Yes Yes Yes Yes Only or Federal No Circuit Yes Yes Yes Yes Yes Yes Yes Yes Federal No of in Board courts possible Yes Yes Yes Yes Yes Yes Yes Yes Technical Appeals Only national or party) if matter matter matter matter matter ground new (patent raised raised)
|
From page 100... ...
100 f million months U.S. Litigation 31 $1-3 Litigants not tentee.
|
From page 101... ...
· Either party could appeal the APJ's decision, first to the Board of Patent Appeals and Interferences, and then to the Court of Appeals for the Federal Circuit. Appeal to the Federal Circuit would invoke estoppel.
|
From page 102... ...
system. Thus, either by legislation or by regulation, Open Review procedures should tightly constrain the schedule to ensure both the timeliness and the lower cost of the process compared with litigation.
|
From page 103... ...
The quality of its output is often questioned and its decisions are widely considered to take too 43The importance of this objective is underscored by the experience reported to the committee of one firm faced with multiple EPO oppositions that dragged on for a total of eight years without resolution, seriously undermining the firm's ability to enforce its patent rights. If the Federal District Courts were inclined to stay infringement proceedings pending the outcomes of unconstrained USPTO reviews, the ability of patent owners to enforce their rights could be delayed even longer.
|
From page 104... ...
These proposals generated vigorous criticism at our August 2002 conference and elsewhere. The principal objection was that prior art searching is an integral part of the examination to determine novelty and non-obviousness and that separating the two functions would almost certainly further degrade patent quality.
|
From page 105... ...
Electronic Processing After a series of false starts, the USPTO opted to adopt the European format for storing patent applications in electronic form. The office is working with the EPO to standardize electronic filing in order to increase its usage.
|
From page 106... ...
Third, it will help the USPTO anticipate the need to develop or acquire information sources on nonpatent prior art or to hold applications until such resources are obtained and examination issues resolved. If the recent decision of the USPTO leadership to contract out patent application classification in any way undermines the office's ability to detect and respond to the emergence of new technologies, it should be reconsidered.44 A second function of improved analytic capability would be to inform management and evaluate proposed administrative changes.
|
From page 107... ...
The patent bar has focused much attention on the fact that for the past several years the fees collected from patent applicants and patent holders have exceeded congressional appropriations to the USPTO by a sub BOX 4-1 Committee Recommendations with Implications for USPTO Resource Requirements Additional Recommendation Savings Cost Institute Open Review procedure Significant Eliminate third-party Small to moderate re-examinations Eliminate interferences Small to moderate Expand examiner corps Substantial Create robust analytical capability Small Implement electronic file wrapper Moderate system
|
From page 108... ...
Although the lawsuit involved the complaint of a former faculty member against a private university employer continuing to use his inventions, a reasonable interpretation of the court's opinion is that formal research enjoys no absolute protection from infringement liability regardless of the institutional venue, the purpose of the inquiry, the origin of the patented inventions, or the use that is made of them. In the judgment of one member of the Federal Circuit, the Madey decision, in combination with a subsequent research exception decision in Integra Lifesciences I, Ltd.
|
From page 109... ...
It is premature to speculate whether the Madey decision will result in more frequent patent infringement lawsuits, for example, between patent-holding companies or individuals and universities. There is some evidence that more universities are receiving notices asserting patent rights in 2003 than in 2002.48 These generally take the form of letters from patent owners' counsel claiming infringement and suggesting or demanding negotiation of licenses or cessation of the activities.
|
From page 110... ...
Where to draw the line is far from obvious. Although much basic research is performed in universities, and companies tend to focus their effects in applied research and development, there is no sharp division of labor, as the Federal Circuit observed in Madey v.
|
From page 111... ...
of the European Patent Convention of 1975 as reaffirmed in 1989 declares, "The right conferred by a community patent does not extend to acts done for experimental purposes relating to the subject matter of the patented invention." All European Union members except Austria have incorporated this provision in national law, and in several countries there has been case law interpreting it to mean that researchers of any affiliation may freely use a patented invention to · determine whether it functions as claimed in the patent; · determine whether something known to work in certain conditions will work in different conditions; · discover something unknown about it; or · improve upon it. 50 The following description of European law relies on a presentation by Josef Straus, director, Max Planck Institute for Intellectual Property Law, Munich, Germany, to a workshop of the American Association for the Advancement of Science, Washington, D.C., April 24 , 2003 (http://sippi.aaas.org/ meetings/04242003/straus_files/frame.htm)
|
From page 112... ...
That is, it aimed to protect activity intended to gain new knowledge but not the use of patented inventions as research tools. It shall not be an act of infringement to make or use a patented invention solely for research or experimentation purposes unless the patented invention has a primary purpose of research or experimentation.
|
From page 113... ...
has recently proposed a categorical statutory exemption for "experimenting on" a patented invention to improve it, whether the experimentation is commercially motivated or not. For experimental use of a patented research tool she proposes some form of compulsory licensing, after a period (perhaps five years)
|
From page 114... ...
The waiver approach also devalues patents, including patents on research tools, by reducing the size of the market and conceivably leading to the development of products that compete with the patented technology. Dreyfuss's response is that waivers will appeal to the relatively few investigators whose work is truly basic, sharply limiting their impact on patent holders; but in that instance the benefit of shifting effort to more fundamental research and expanding the public domain of research results is also limited.
|
From page 115... ...
patents in the course of their funded work in the following manner: For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.55 The authorization has not often been extended to grantees, although the Department of Energy has exercised this option,56 and at least one federal district court decision inferred that the government had extended authorization and consent to a research grant recipient accused of infringement.57 55An alternative legal basis for the government to extend protection to federally supported researchers is the Bayh-Dole Act, under which it may assert a "government use" claim on a patented invention rather than the activity as a whole. This would only shield infringement of a governmentsupported invention, however, whereas "authorization and consent" could shield the use of any patent.
|
From page 116... ...
It is somewhat targeted at the fundamental research end of the R&D spectrum simply because a large proportion of basic research, as defined in government surveys of R&D performers, is financed by the federal government at universities and other nonprofit institutions. Furthermore, by shifting rather than removing infringement liability, the approach is somewhat sensitive, too, to the rights of research tool as well as other patent holders, who may seek damages from the government in the Court of Federal Claims.
|
From page 117... ...
Accused infringers are usually charged with having done so "willfully," which if proven exposes them to a possible penalty of triple damages. The patent holder frequently is faced with the defenses of "best mode" and "inequitable conduct." The former examines whether the inventor disclosed in an application what the inventory considered to be the best implementation of the invention, while the latter addresses whether the patent attorney intentionally misled the USPTO, usually by failing to disclose important known prior art.
|
From page 118... ...
In practice the threshold question, usually submitted to a jury, is whether the defendant has been "willful" in the infringement. If the jury finds willfulness, then the judge will determine whether and how much to increase damages within the permitted range based on a list of factors articulated by the Federal Circuit.
|
From page 119... ...
64As noted above, the Federal Circuit has taken for en banc review a willful infringement case, Knorr-Bremse v.
|
From page 120... ...
"Best Mode" Defense65 Section 112 of the Patent Act requires that an application "set forth the best mode contemplated by the inventor of carrying out his invention." As interpreted by the Federal Circuit, this requirement is judged by a two-part test; first, did the inventor, at the time of filing, know of a mode of practicing the invention that the inventor believed was preferable to others; and second, was the best mode adequately disclosed, in light of the scope of the claimed invention and the level of skill in the art. The first test is inherently subjective, focusing on the inventor's state of mind; and although the second test is objective, it is not precise.
|
From page 121... ...
Its goal is to motivate more extensive disclosure to the public by increasing the risk of withholding related information as a trade secret. As explained by the Federal Circuit's predecessor court, the purpose of the requirement is to "restrain inventors from applying for patents while at the same time concealing from the public preferred embodiments of their invention which they have in fact conceived."66 Analysis of the best-mode defense is made as of the time the inventor filed the original application; there is no obligation to "update" the application with information discovered during prosecution of the patent.
|
From page 122... ...
he habit of charging inequitable conduct in almost every major patent case has become an absolute plague."70 If invalidity, disciplinary action, and reputational concerns are not sufficient deterrent to misconduct, other civil and even criminal remedies exist -- antitrust, unfair competition, common law fraud, and tortuous interference. Moreover, since the creation of the inequitable conduct doctrine by the courts, other safeguards 68 The effect of the USPTO rule change has not yet been decided by the Federal Circuit.
|
From page 123... ...
The latter might include ending the inference of intent from the materiality of the information that was withheld, de novo review by the Federal Circuit of district court findings of inequitable conduct, award of attorney's fees to a prevailing patentee, or referral to the USPTO for re-examination and disciplinary action. Any of these changes would have the effect of discouraging resort to the inequitable conduct defense and therefore reducing its cost.
|
From page 124... ...
These developments are a recognition that in an increasingly integrated global economy, differences in patent law create redundancy and inconsistencies that raise the cost of doing international business. The committee did not consider the thorny issues associated with reconciling differences in intellectual property protection between developing and industrialized countries but is primarily concerned with differences in patent examination among the latter, especially the United States, Europe, and Japan.
|
From page 125... ...
125 filed claims of Number per patent claims per 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 rof 2002 claim 2001 (numbe one than 2000 claims filings of more 1999 JPO 1998 number filings allowing total 1997 EPO to (2003)
|
From page 126... ...
examined two sets of interference cases -- first, 76 final adjudications by the Board of Patent Appeals and Interferences (BPAI) between 1990 and 1991 that were decided by determining who was the first inventor; and second, a random selection of the few hundred interference proceedings reported on the BPAI web site between 1997 and 2003.
|
From page 127... ...
patent law. Prior Art In the interest of arriving at a uniform definition of prior art, the United States should remove its limitation on non-published prior art and its rule that foreign patents and patent applications may not be recognized as prior art as of their filing dates.
|
From page 128... ...
Given that patent laws are part of historically evolved national legal systems there may be limits to harmonization, but these are likely to recede over time as the international economy becomes more integrated and enterprises more dependent on global markets. Reconciling patent system differences will be challenging but would make the outcome of this so-called "deep harmonization" more rewarding.
|
From page 129... ...
This practice is helpful not only in identifying issues for negotiation but, more immediately, in informing patent applicants how their inventions are likely to be treated in each of the patent offices. The committee recognizes that its proposals, apart from foreign adoption of a grace period, would represent U.S.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.